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Discussion Starter #1
Sorry I'm such a Times junkie, but they do have some great stuff. Today's Times has an interactive feature called "31 Steps to a Financial Tuneup"

http://www.nytimes.com/interactive/2010/03/24/your-money/financial-tuneup-checklist.html?hp

Geared to Americans of course, but much of it applies up here as well. Each item in the checklist has an explanation ("Why it Matters") and links to more information.

Much of it's basic common sense stuff, but it's helpful to have it in checklist format like this, with an estimate of the amount of time it'll take you to complete each task (I think some of those estimates are very optimistic).
 

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Wildly optimistic is right! They suggest it will take you longer to check your credit online than it will to rebalance your investment portfolio.

I also like "reconsider your investments" to which they have generously allotted a whopping 30 minutes to "compare, contrast, project and adjust" the rate of return and your plans for your retirement funds, kids' education, and real estate holdings . :p
 

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Sorry I'm such a Times junkie, but they do have some great stuff. Today's Times has an interactive feature called "31 Steps to a Financial Tuneup"

http://www.nytimes.com/interactive/2010/03/24/your-money/financial-tuneup-checklist.html?hp

Geared to Americans of course, but much of it applies up here as well. Each item in the checklist has an explanation ("Why it Matters") and links to more information.

Much of it's basic common sense stuff, but it's helpful to have it in checklist format like this, with an estimate of the amount of time it'll take you to complete each task (I think some of those estimates are very optimistic).
That's neat brad. Thanks for sharing.

As an aside, checklists are a very good idea:

http://www.bloomberg.com/apps/news?pid=20601088&sid=a88b_yggIXDc
 

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crass, considering it's the ny times. This checklist advises spending two and a half hours fiddling with reward points while whizzing your loved one through your entire financial existence in 30 minutes.

but also in the ny times, caring for that nest egg:

http://www.nytimes.com/2010/03/14/magazine/14fob-wwln-t.html

d'you think any of your neighbours are keeping hens ?
it's the newest cool. Usually an undercover operation. Has to be done in secret. Muni by-laws etc.
the giveaway is a faint cluck now & then plus the odd single duvet feather floating in the breeze.

soon as you've sussed out a neighbour you know what to do. You'll shut up for half-a-dozen eggs a week. In no time at all you'll be ordering your own personal peep of baby chicks.
 

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Coming back to this, because it raises some issues for me which I've been thinking about for years now.

My problem with this list is that it is incredibly generic. For example: "reconsider your investments" - with that magic half-hour budgeted for this task. Reconsider them how? What criteria would you use? Here's what the Times says you need to handle in that half-hour: Are you saving too much for a down payment or children's college tuition but not enough for retirement?

Good gosh, how would you know?

(and why the HECK would the Times say "ask your cable company for a better deal" without suggesting that you review the fees you are paying on your investments and suggest people consider whether there are lower-cost alternatives?)

It isn't that I want to dump on the Times (one of the pleasures of my life is settling in with the Sunday print edition of the Times for an hour or so every weekend). It's that I really despair at this kind of very basic and generic financial advice. Who does it really help? and does it really help?

I don't know whether anyone here reads Ramit Sethi, the "I Will Teach You To Be Rich" guy. What I like about him is that he provides specific scripts to walk people through money-saving scenarios. Not just "reconsider your investments."

I don't have any grand sweeping conclusion here. I'm just kind of despairing at the state of financial journalism and "financial advice," writ large. When you read posts on this site from people who say, "I don't know where to start" - I think they get great responses. But I also think that if someone handed them that list from the Times, they'd very possibly be no better off than before they got the list, because there's very little practical value in the list, IMO.

Anyways. Thoughts?
 

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Discussion Starter #6
I'm just kind of despairing at the state of financial journalism and "financial advice," writ large. ... But I also think that if someone handed them that list from the Times, they'd very possibly be no better off than before they got the list, because there's very little practical value in the list, IMO.
Now that I've spent some time with that list, I agree. I suspect they wanted to make it look easy and simple to avoid scaring people off (a 31-step checklist is scary enough in itself).

I do think that responding to specific questions about specific situations is in many ways easier and certainly more effective than trying to provide generic advice that will apply to everyone. The problem with generic advice is that 9 times out of 10 it won't apply perfectly to your situation, and once you hit a speed bump in the process, you stop because you don't have the time or knowledge to pursue it further.

When I look at my own financial life, many of the things I'm still doing wrong are being done wrong simply because I hit one of these barriers and gave up (mainly due to lack of time), or at least postponed a decision until I have time to get smart (or get advice from people on this board).
 

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I honestly believe, kind of one of those "with every fibre of my being" things, that these are the kinds of issues people should be taught to think through when they are children and young adults - and I also think that these are the kinds of discussions people should be having with each other in general. Right?

My thought is that people should not just be receiving and reading lazy "advice" like "buy term and invest the difference" or "stocks for the long run" or [you choose piece of generic financial wisdom here].

I truly believe that people should be taught to think through these issues - how to understand what the problem is (I mean that in the sense of "math problem"), how to find the information you'd need to solve the problem, and how to construct the problem so that it is solveable (or at least to solve the parts that are solveable, and distinguish the parts that are not).

I know that this is what people mean when they talk about financial literacy. I guess I'm saying I'm all for it. It's why I spend as much time here as I do. I *love* these conversations - I love learning more about finances and talking with other, like-minded people - AND with people who are NOT of like mind. :D
 

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Coming back to this, because it raises some issues for me which I've been thinking about for years now.

...


It isn't that I want to dump on the Times (one of the pleasures of my life is settling in with the Sunday print edition of the Times for an hour or so every weekend). It's that I really despair at this kind of very basic and generic financial advice. Who does it really help? and does it really help?

...

I don't have any grand sweeping conclusion here. I'm just kind of despairing at the state of financial journalism and "financial advice," writ large. When you read posts on this site from people who say, "I don't know where to start" - I think they get great responses. But I also think that if someone handed them that list from the Times, they'd very possibly be no better off than before they got the list, because there's very little practical value in the list, IMO.

Anyways. Thoughts?
As a publisher (albeit much smaller and crappier than the Times) I can tell you that the more specific and detailed an article is, the less it will get read. If you are in the business of getting eyeballs then you want more generic "easy" sounding articles.
 

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Discussion Starter #9
I also think that these are the kinds of discussions people should be having with each other in general. Right?
The only problem with that is that you end up with a lot of hearsay being passed on. This is why we hope that sources like the Times will offer an "expert" opinion from someone who knows more than we do. Whether that's true or not is a separate question, but I think there will always be a need for sources of advice you can at least hope to trust more than what you hear from your friends or read on an online forum.

A forum (or blog) is good in that it's a two-way street: if someone posts bad advice, they'll generally get called on it--assuming people will take the time to do so.

I guess what makes me nervous is that "people talking to each other" is part of what caused and extended the current recession. So you'd have to modify that to "informed people talking to each other," which gets at your point that we should all be trained how to think critically about this stuff (and how to think critically in general) at an early age.
 

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Brad - you said what I was trying to say. I think people should be trained to think through financial problems. As a secondary point, I think people should talk about financial problems from that critical thinking standpoint.

Wouldn't it be great if we did *not* have to turn to "informed opinions" for basic financial problems like "should I buy term and invest the difference"?

I know what I'm saying isn't practical and wouldn't sell newspapers. But a girl can dream, can't she? :rolleyes:
 

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Discussion Starter #11
Wouldn't it be great if we did *not* have to turn to "informed opinions" for basic financial problems like "should I buy term and invest the difference"?
Yep, it would, but there are so many other things in life about which we could say the same thing: basic medical advice, exercise advice, travel advice, etc.; nobody has time to get smart about everything. Even if we develop our critical thinking skills, it takes time to learn the facts (and to even find out where to get reliable facts). Time is the biggest limiting factor.

In fact this is kind of like the recipe discussion we had in another thread. If I had a good solid grounding in the basic principles of which foods go together and which ones don't, I could probably cook entirely without recipes, making meals up as I go along. But would I have time for all that experimentation? Probably not. It's a lot easier to rely on ready-made recipes that a professional chef or cook has developed and spent time testing until they're just right.

I was just reading an article in a bicycling magazine about how the current fad among competitive cyclists who want to lose weight at the beginning of the season is to eat a protein-rich diet, because "that's what the Tour de France riders do." This kind of folklore spreads like wildfire and even people with decent critical thinking skills can get suckered into it. In reality, as the magazine pointed out, there are very robust published studies that show you don't lose weight any faster on such a diet than you do on any other diet, and that the single most effective way to lose weight is to simply eat less, so the calories you ingest are less than the calories you expend. Sometimes you really need someone who works on this stuff full time to point out where popular folklore is wrong and point people to the evidence.
 

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Brad - you said what I was trying to say. I think people should be trained to think through financial problems. As a secondary point, I think people should talk about financial problems from that critical thinking standpoint.

Wouldn't it be great if we did *not* have to turn to "informed opinions" for basic financial problems like "should I buy term and invest the difference"?

I know what I'm saying isn't practical and wouldn't sell newspapers. But a girl can dream, can't she? :rolleyes:
As always you're right, MoneyGal. People should be trained to think through their financial problems. But think how dangerous that practice would be. If people thought through their financial problems, it would only be a matter of time before people thought through non-financial problems. For example, why do we send criminals to prison to become better criminals, or why have we been fighting the war on drugs for a century, or how long is this war on terrorism supposed to last? :)
 
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